It's About Time—and Money
Workforce management technology has come a long way from time clocks. Today's tools can save—or cost—companies millions. And thanks to a new group, the once-frumpy field is coming into fashion.
A drab corner of the HR technology field is in the midst of an extreme makeover.
For years, the field of workforce management technology was the province of time clocks, simple scheduling software and pedestrian payroll systems. Most of the limelight in the human resources software world for the past decade or so has gone to talent management applications such as recruiting, compensation and learning tools.
But, quietly, the less-trendy territory of workforce management has evolved into a powerful set of technologies. There are biometric readers to scan fingerprints and prevent fraud; sophisticated scheduling tools that not only can save managers countless hours in assigning shifts but also minimize unnecessary overtime pay and tightly couple staffing levels with business demand; and there are also analytic tools that can optimize workloads for organizations and individuals.
Taken together, the applications can save companies millions in their biggest overall expense: labor. But the products aren't always used positively. Advanced scheduling tools can be taken too far, leading to unintended costs, employee frustration, diminished customer service and reduced profits.
Lexy Martin, director of research and analytics for advisory firm CedarCrestone Inc., is among the experts who see workforce management as a critical, if underappreciated, field.
"It's strategic," Martin says. "It's just not sexy."
That may change soon. To raise the profile of the workforce management arena and the people who manage those systems, a new professional group has emerged. The Workforce Educational Organization opened its doors last year and plans to launch a new professional credential beginning next year.
If the WEO's organizers have their way, experts in workforce management technology will not only escape from the corporate back office but also attract the attention of C-suite executives.
The certification will take what have been dead-end jobs supporting payroll systems and make them critical because these professionals will understand how to use systems that have become vital to effective people management, says WEO co-founder Lisa Disselkamp. "It's like opening a door from the basement," she says. "You've got this path into the larger organization."
To a large extent, the WEO is Disselkamp's baby. She has been one of the loudest voices proclaiming the merits of workforce management technology. She has written two books on the subject, and led her own consulting firm focused on workforce management tools before taking a post at Deloitte Consulting earlier this year as director of human capital and human resources transformation.
A couple of years ago, Disselkamp pitched the idea of a professional certification to a trade group of vendors making workforce management technology. The group, the Independent Time & Labor Management Association, loved the idea, Disselkamp recalls. "There was this sigh of relief."
That sigh had to do with the fact that the field has advanced and attracted more customers but suffered from low visibility. Workforce management applications refer to a range of tools for tracking the hours of employees, keeping tabs on their absences and assigning their schedules. Vendors including Infor, Kronos Inc. and Oracle Corp. sell workforce management products.
The origins of the technology are in the clocks that workers have used to punch their time cards for decades. But the field has advanced dramatically, especially in recent years. Time-keeping systems, for example, have adopted sophisticated technologies such as biometric readers that reduce fraud by requiring employees to sign in with their fingerprint or "hand geometry." And scheduling systems now have the capacity to account for myriad inputs, including union contract rules, overtime regulations, worker preferences and customer demands. Scheduling tools can optimize staffing levels for time windows as narrow as 15 minutes—enabling retailers, for example, to precisely match store foot-traffic patterns with employee numbers.
Workforce management applications can vary widely in price. Large firms with more than 10,000 employees installing scheduling tools on their own computers might spend hundreds of thousands of dollars for a software license. But even small firms can benefit from the tools. It's possible to find applications delivered over the Internet—using the software as a service approach—that cost just dollars per month per employee.
And the payoff can be significant. Research from CedarCrestone found that organizations that used all three kinds of workforce management applications—time management, absence management and labor scheduling—enjoyed operating income growth last year of 11 percent. Companies that used two or fewer types of workforce management applications reported operating income of just 4 percent. CedarCrestone's Martin says the operating income benefits associated with the tools come both from reduced staff needed to manage time-and-attendance issues as well as from better scheduling practices—which trim overtime hours and pay.
Jason Averbook, CEO of advisory firm Knowledge Infusion, says the cost-savings potential of better schedules and reduced overtime pay dwarfs other efficiency efforts HR departments have taken, such as eliminating paper and encouraging employee "self-service" for tasks such as time-off requests.
"In all of the different areas that organizations can save money, one of the last remaining holy grails is this concept of time and attendance management," Averbook says.
But in the crusade for lower labor costs, companies can go too far. Organizations using workforce management tools can focus too much on pairing staffing levels with customer demand. The resulting employee schedules can vary widely from one week to the next, with the volatility causing havoc for people as they try to meet family obligations such as taking kids to sports practices and music lessons. Another problem is that scheduling for just-in-time business operations can result in workers getting too few hours each week to make ends meet.
These aren't just concerns for employees. Joan Williams, director of the Center for WorkLife Law at the University of California's Hastings College of the Law in San Francisco, says scheduling practices that give workers meager hours often backfire for businesses in the form of back-end labor costs, such as higher turnover and greater absenteeism.
Disselkamp agrees that workforce management technology must be used wisely. "These things are starting to be a danger in the wrong hands," she says.
Nonetheless, more and more companies have been buying workforce management products. In 2007, 51 percent of the 466 companies surveyed by CedarCrestone used time-management software. By last year, when CedarCrestone polled 727 organizations, the share with time-management software had jumped to 73 percent. Currently, roughly 3 in 10 organizations use labor scheduling software. Firms of all sizes use scheduling tools, though they tend to be in certain industries such as health care, retail and public utilities, Martin says. She expects the number of scheduling software customers to increase with time.
Despite the potency and growth of the field, it has been something of a forgotten child in the corporate pecking order. Responsibility for workforce management tasks often is split at organizations among payroll departments, HR offices and operations. In addition to uncertainty over who owns workforce management and its applications, the field has had to overcome its legacy as being less-than-mission-critical processes like time-card punching and paycheck calculations.
Talent management applications may have gotten more buzz than workforce management technology in recent years. But any rivalry between the fields may soon fade. Averbook says the next step is to combine the two technologies. "I can actually start using the right people at the right time at the right place."
That strategic vision for workforce management tools is in keeping with what Disselkamp has been preaching for years. To raise the profile of the technology and the field, she and others have launched the Workforce Educational Organization. A 501(c)(3) not-for-profit based in Lemont, Illinois, the WEO is seeking professional members to sign up at $100 per year. One of its long-term goals is to persuade companies to create a "workforce management office"—akin to corporate project management offices—that would centralize matters of time and attendance and scheduling.
Disselkamp is hopeful the organization will grow into the hundreds of thousands of members within several years (for comparison, the Society for Human Resource Management has about 250,000 members on its rolls). That growth will likely depend on how well the organization's novel certification takes off. Dubbed the Workforce Asset Management Professional certification, or WAM-P, it will require practitioners to demonstrate expertise on topics ranging from scheduling to vendor selection to data analysis. Certification will cost $450 for WEO members and $595 for nonmembers. Disselkamp says publishing firm John Wiley & Sons Inc. has agreed to publish a textbook that will serve as the basis of the certification.
An intriguing twist to the certification and the WEO generally is that organizers have sought to include employee perspectives as they define workforce management best practices. Disselkamp says the group has been in talks with the U.S. Labor Department about the ways scheduling tools can improve employment opportunities for people with disabilities. The organization also plans to reach out to organized labor. And it established an academic advisory council. That council is led by University of Chicago associate professor Susan Lambert, whose research has shown that tightly coupling labor levels with customer peaks and valleys has hidden downsides for both workers and managers in the form of increased turnover and reduced sales effectiveness. Lambert is working to make sure those earning the group's certification learn "to balance the needs of the workers with the needs of employers."
Another scholar advising the WEO is Williams of the Center for WorkLife Law. Williams says it's rare for a business group to seek to include employee perspectives. "It's very unusual," she says. "Lisa Disselkamp is really a visionary."
Disselkamp's effort to take into account employee views is a selling point to Mike Starosciak, marketing communications manager for Datamatics Management Services, which sells time-and-attendance software. Starosciak also likes the way the new organization is committed to a neutral, vendor-agnostic approach to the field. The Fords, New Jersey-based Datamatics contributed $5,000 to the launch of the WEO, and not just because of its objective stance to workforce management. Datamatics is looking forward to the way the new certification will help practitioners get more value out of the software, Starosciak says.
He gives the example of analyzing data to find that a certain worker is highly productive when working 30 hours a week or less, but suffers a productivity drop-off when required to work longer hours. Professionals who discover such nuggets will allow for smarter scheduling, Starosciak says. "The system can only do so much if you don't have the right policies in place," he says.
Despite support from industry players such as Datamatics, the WEO faces obstacles. For one thing, HR certifications have recently come under scrutiny. Certifications can cost professionals hundreds of dollars in training materials and course fees. Observers, for instance, have questioned whether certifications issued by the HR Certification Institute are a good value.
Those certifications, including the Senior Professional in Human Resources, are part of an ever-larger number of HR-related credentials. And that plethora of industry certifications raises the question of whether the Workforce Asset Management Professional credential will stand out from the crowd and attract practitioners.
Related credentials, for example, include the Fundamental Payroll Certification issued by the American Payroll Association, the Strategic Workforce Planning certification granted by the Human Capital Institute and the Human Resource Information Professional Certification offered by the International Association for Human Resource Information Management, known as IHRIM.
The Human Resource Information Professional Certification itself is relatively new. It was launched in early 2010. As of January, some 300 people had earned the certification. It is intended to cover the broad landscape of HR technology matters, and it addresses time and attendance, says Nov Omana, chairman of IHRIM. Still, Omana welcomes the new credential and the WEO group overall as complementary to the association and its certification.
Jacqueline Kuhn, a former chairwoman of IHRIM who helped design the Human Resource Information Professional Certification, has a different take. Kuhn, currently an HR technology manager at spirits-maker Beam Inc., says she can see value in the upcoming WEO certification program if it provides detailed formulas for staffing and technology use according to different industries. But overall she's skeptical of the need for a workforce management technology certification: "It seems very narrow."
The Workforce Asset Management Professional certification will avoid formulas, says Ed Colby, who is spearheading marketing efforts for the WEO. Colby, who is global solutions manager at workforce management software vendor SumTotal Systems, says such recipes tend to be too simplistic to help organizations. Instead, he says, the WEO certification is designed to "help people think more broadly, strategically, so they can solve problems in multiple contexts."
In other words, Colby, Disselkamp and the other folks behind the WEO aim to boost the smarts and the stature of people who have been largely relegated to the back office.
Given the rise of workforce management technology, this makeover—including the new certification—is coming at the right moment, CedarCrestone's Martin argues. She does so in terms workforce management professionals would appreciate. "I think it's time," she says.
Ed Frauenheim is Workforce Management's senior editor. To comment, email email@example.com.